Netflix hosted its Q4 earnings call on Tuesday, and it was mostly good news for shareholders. But what caught our attention was company co-CEO Ted Sarandos teasing that the streamer is discussing a potential sequel to its 2023 hit animated feature Leo.
During the Q&A portion of the call, Sarandos said, “We’re kicking around the Leo 2 right now; it’s a film that worked on so many levels.” The studio had previously announced that it is developing a sequel to Sea Beast, which would make Leo 2 the second sequel being developed by Netflix Animation.
In a shareholder’s letter accompanying the call, Netflix explained that Leo was its most successful original film, animation or live action, in Q4 last year. Sarandos was asked why he thinks Leo has resonated so well with subscribers versus other Netflix animated features and replied:
I think Leo has resonated for the same reason that Sea Beast did last year. It’s great. People really love it. It brings a lot of joy to families. And yes, they do watch them over and over again, which drives a lot of engagement but also drives a lot of attachment. I think that Leo and Sea Beast are proof points that we have the flywheel to create original IP in that animated space, and there is so much appetite for animated features.
Leo had Netflix’s largest-ever debut for an original animated feature when it was released in November and has landed in Netflix’s weekly top 10 most-watched English-language films list nine times, a record for one of its original animated films. Previous record-holders were Back to the Outback and Sea Beast, which each cracked the top 10 seven times.
Shifting away from the Leo talk, Sarandos talked very briefly about Netflix’s big-picture animation ambitions:
The animation — the art of the animation is beautiful. The comedy is funny, and families just really love it. So, we look forward to a lot more. We have Spellbound coming up next year. We’re just really thrilled with our — that the animation team is now firing on all cylinders.
The co-CEO’s comments echo sentiments that Sarandos shared at the UBS Global Media and Communication Conference in December last year when he boasted that Netflix plans to increase its animated feature spend in 2024.
CORRECTION: An earlier version of this article reported that “Leo 2” was the first sequel announced by Netflix Animation. It is the second; the studio announced last yer that it was developing a sequel to “Sea Beast.”